Why Social Networking Matters for Your Bottom Line
The business case for social networking in 2006, measured against what it costs to reach an audience this size through traditional media.
Skepticism about social networking as a real business channel, rather than a novelty for teenagers, is still common in 2006, and it’s a fair starting position. The case for it has to be made on numbers and cost, not enthusiasm.
Start with the size of the audience
MySpace alone has grown to well over a hundred million registered accounts and, for stretches of this year, has been the most visited website in the United States, ahead of Google in weekly page views. That’s not a niche audience anymore, it’s one of the largest concentrations of attention on the internet, and it’s sitting there at a fraction of the cost of reaching a comparable audience through television or print.
The cost comparison is the real argument
A local or regional TV spot, or a run of print ads in a major paper, requires a media buy measured in thousands of dollars before you’ve produced anything. Building a MySpace presence costs staff time and, if you’re doing it well, some thought about what your customers want to see. That’s a fundamentally different cost structure. It doesn’t mean social networking is free, someone has to run it consistently, but the barrier to reaching a meaningful audience has dropped by an order of magnitude compared to the channels most small and mid-sized businesses have relied on until now.
Word of mouth moves faster here
The Arctic Monkeys built a substantial following through 2005 and into this year almost entirely through fans sharing music on MySpace, well ahead of any major label marketing push. That’s the clearest existing proof that word-of-mouth recommendation, always the most trusted form of marketing, moves faster and reaches further inside a social network than it did through email forwards or in-person recommendation alone. A satisfied customer telling their network about you on a platform this size is a meaningfully bigger event than the same recommendation made privately.
It rewards a different kind of investment
Traditional advertising buys attention for the duration of the campaign and then stops. A well-run social profile keeps compounding: the comments, the returning visitors, the accumulated sense that a real business with a real personality is behind it, all of that persists and keeps working after the initial effort. That’s a different kind of asset than a media buy that ends when the budget runs out.
Where the caution belongs
None of this means every dollar should move from traditional marketing to a MySpace profile tomorrow. The audience here, while enormous, still skews younger than the customer base of plenty of established businesses, and the format rewards authenticity in a way that punishes companies faking it. The bottom-line case isn’t “abandon what’s working,” it’s “the cost of testing this channel is low enough, and the audience large enough, that not testing it is now the riskier choice.”
The practical number to watch
Track how much it costs you, mostly in staff time, to build and maintain a presence here against what the same reach would cost through a traditional media buy. For most businesses running that comparison honestly in 2006, the gap is wide enough that social networking earns a real budget line, not just an intern’s afternoon project.
